With the tightening of economy, getting new customers can be difficult. Your potential customers may be tightening their spending, cutting back on costs and not buying from you. You, on the other hand, may also be cutting back on your spending including marketing as your cash flow tightens up. Given this scenario, it is very important to hold on to your existing customers who already know you (and may even love you!). Increasing sales from this group could be a way for you to ride out the recession well.
Here’s a good tip from Tom Shirkey, Founder and President, Loyalty Advantage published in DM News Magazine (January 26, 2009 issue, page 6) on how fostering customer loyalty can help small businesses survive the recession:
Allocating budget dollars toward existing customers is even more critical during an economic slowdown. In a down economy, loyal customers are your No. 1 asset because they provide the highest marketing ROI. …
Uncertainty has led to increasing cost consciousness. Lower prices, discounts or temporary incentives from competitors look increasingly attractive to price-sensitive consumers. That is why it is critical to reach out to your best customers and reinforce your value proposition. You can provide tailored products, services, messages and offers. The goal is to redirect the mindset from “who has the lowest price” to “who provides the best value.”